USD/CAD clings to recovery gains above 1.34, looks to snap 2-day losing streak
- WTI drops to multi-month lows on Wednesday.
- US Dollar Index rebounds after dropping below 97.
- PMI reports helps greenback recover losses suffered after ADP data.
The USD/CAD pair is looking to snap its 2-day losing streak with the commodity-related loonie feeling the weight of the crude oil selloff on Wednesday. Following a drop to a fresh 2-week low at 1.3360 on Wednesday, the pair reversed its direction in the NA session and moved into the positive territory above 1.34. As of writing, the pair was up 0.16% on a daily basis at 1.3410.
Earlier today, the weekly report published by the EIA showed that crude oil stocks in the U.S. increased by 6.8 million barrels in the week ending May 31 and weighed on the West Texas Intermediate. With the initial reaction, the WTI slumped to its lowest level since mid-January at $50.60. Although the WTI staged a modest rebound and was last seen trading a little below $52 with a daily loss of 2%, the pair didn't have a difficult time pushing higher supported by the USD strength.
The US Dollar Index, which slumped to its lowest level since early April at 96.75 after the ADP data showed a much smaller increase in private sector employment than expected, took advantage of the PMI data and gained traction later in the session and was last seen adding 0.15% on the day at 97.28.
Today's macroeconomic data releases from the U.S.
- US: ADP private sector employment change +27K in May vs. 180K expected.
- US: Markit Services PMI in May comes in at 50.9 (final) to match expectations.
- US: ISM Non-Manufacturing PMI improves to 56.9 in May vs. 55.5 expected.
On Thursday, trade balance data from both Canada and the U.S. will be looked upon for fresh impetus.
Technical levels to consider